Crypto EDU

Altcoins

  • August 2, 2021
  • Intermediate
  • cryptocurrency
Altcoin Anim delivery (0-00-03-08)

In the beginning, there was Bitcoin. The protocol was designed by an anonymous person (or a group of people) calling themselves Satoshi Nakatomo and was released to the public in 2009. It was a paradigm shift. All of a sudden, money could circulate independently of a central authority, and transactions no longer required the involvement of a third-party institution, like a bank. 

It didn’t take long for other cryptocurrencies to emerge, especially since Bitcoin’s source code is free to download and alter. Those currencies are called altcoins—a contraction of “alternative coins.” Some feature different mechanisms to validate transactions and mine new coins. Some are not currencies, strictly speaking, but tokens designed to be redeemed for services within a specific network. And some, known as stablecoins, are tethered to real-life assets like gold or U.S. dollars.

Today, there are almost 10,000 cryptocurrencies in circulation. According to coinmarketcap.com, as of early May 2021, Bitcoin accounts for 48% of the total market value for cryptocurrencies, with altcoins making up the remaining 52%. 

For much of their history, the fluctuations of altcoins have tended to mirror those of Bitcoin, but that is changing as altcoins like Binance Coin and Cardano have increasingly begun to chart their own course. As other cryptocurrencies find success, it’s worth asking whether the term “altcoins,” which has long had a dismissive connotation, should still apply to these now-established alternatives—or whether they should be considered on par with Bitcoin in terms of cachet.  

Why should you care about altcoins?

The variety of cryptocurrency coins has become more diverse over time, and that trend will likely continue, as entrepreneurs and developers are continually finding new use cases for digital assets and creating new protocols to solve for them. As the value and usage of these alternative coins grows, altcoins can be expected to play an increasingly prominent role in the world of crypto.

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